Schwendimann v. Arkwright Advanced Coating, Inc., No. 18-2416 (Fed. Cir. 2020)Annotate this Case
Starting in 1992, Schwendimann worked at ACT, which manufactured paper coating products. In 1998-2000, Schwendimann and Nasser (ACT's owner) filed the 983 and 845 patent applications; both were named as inventors. Schwendimann filed the 910 application as the sole inventor. All three applications were assigned to ACT. When ACT ceased operations in 2001, it owed significant debts. ACT gave Schwendimann a $282,073.25 promissory note for unpaid wages. ACT agreed to assign its patent applications to Schwendimann to satisfy its outstanding debt to her..Schwendimann agreed to satisfy ACT’s debts to its law firm, SLW. An SLW attorney was instructed to file the necessary documents. SLW filed an incorrect assignment for the 845 application.
In 2011, Schwendimann sued Arkwright for infringement and became aware of the incorrect assignment; ACT's assignment to Schwendimann was then recorded with the Patent Office. The district court rejected a claim that Schwendimann lacked standing, finding that ACT assigned the 845 application to Schwendimann in 2002. A judgment of willful infringement was entered; the jury awarded Schwendimann damages of $2,624,228.00. The court awarded prejudgment interest of $1,915,328.00, applying a 10 percent interest rate, under Minnesota law.
The Federal Circuit affirmed. Arkwright’s proposed 1.42 percent interest rate was insufficient to place Schwendimann in as good a position as she would have been in, had Arkwright entered into a reasonable royalty agreement; the prejudgment interest rate should be calculated based on the amount of damages awarded, not of Arkwright’s final settlement offer. Arkwright failed to provide a written offer.